clear

**********************
*** Simulated Data ***
**********************

set seed 12345
matrix m = (4,8)
matrix sd = (.5,.5)
drawnorm x1 x2, n(200) means(m) sds(sd)
drawnorm u v

g d = 0
replace d = 1 if v>0

g y1 = 1 + x1 + u
g y2 = 3 + x2 + u

g y = 0
replace y = y1 if d==0
replace y = y2 if d==1

g x = 0
replace x = x1 if d==0
replace x = x2 if d==1

reg y x if d==0
predict y0h
reg y x if d==1
predict y1h

twoway (scatter y x if d==0) (line y0h x) (scatter y x if d==1) (line y1h x)

g te = y1h - y0h
su te
reg y x d

*********************
*** WAGE1 example ***
*********************

use "C:\Users\royj\Dropbox\eco5720\Data Sets- STATA\WAGE1.DTA", clear

keep wage married educ exper tenure numdep

reg wage married educ exper tenure numdep

* You may need to install psmatch2 first using: "ssc install psmatch2" *
psmatch2 married educ exper tenure numdep, out(wage) ai(1) ate n(1) logit
pstest
psgraph
sort _id

g teff = .
replace teff = wage - _wage if _treated==1
replace teff = _wage - wage if _treated==0
su teff

* An alternative command *
teffects psmatch (wage) (married educ exper tenure numdep), ate nn(1)
teoverlap, ptl(1)
tebalance summarize